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Flood Insurance

First Floor Coverage, LOMA and LOMR-F Issues

Many victims have complained of partial or complete denials of coverage for their first floor flood damage. Based upon the linked correspondence, these problems generally stem from two issues, i.e. a) improper policy interpretation in the case of Elevated Buildings as that term is defined by FEMA and described below; and b) improper flood zone and elevation ratings.

FEMA defines an Elevated Building as: A building that has no basement and has its lowest elevated floor raised above the ground level by foundation walls, shear walls, posts, piers, pilings, or columns.

Click here to see example of wrongful denial of coverage and LOMA issue.

 

Elevated Building Policy Interpretation Issues

Many complaints have been received in regards to denials of claims for first floor flood damage coverage. Some of these cases have ultimately been resolved to the satisfaction of the policyholder after significant efforts are made to bring the matters to the attention of senior FEMA officials. The amounts wrongly denied in some cases have reached $250,000.

FEMA regulations, bulletins, memos and face-to-face meetings make clear that a basic premise of flood insurance is to elevate the insured risk above the base flood elevation. In other words, for structures built generally after 1974, in order to qualify for full coverage up to the limits of the policy, the risk must be out of harms way.

This issue can more easily be understood in the case of a typical beachfront property built upon pilings. In this example, the structure has a concrete slab and parking space beneath the lowest elevated first floor. That same first floor is eight feet above the ground, however, only one foot above the base flood elevation.

In the event that the property owner enclosed the slab area after 1974 (without a building permit because such an enclosure would not meet all building codes and requirements), and a flood occurred, the enclosed slab area would be eligible for very narrow coverage.

In response, many adjusters report that they have been trained that “coverage starts where the pilings stop”. FEMA documents make clear that such a position is contrary to FEMA’s official position. In fact, the latest wind and flood resistant building techniques call for pilings to extend through the first floor. In this way a home can not be easily knocked off of it's pilings. Nevertheless, many victims report that they have been denied first floor coverage regardless that their elevated first floor is above the base flood elevation. Click here to see FEMA and other documents regarding first floor coverage determination.

 

Improper Ratings, LOMA and LOMR-F Issues

Since the mid 1970’s FEMA has formulated policy premiums based upon the risk of flooding as determined by a building’s elevation and proximity to an area likely to be subjected to severe flooding.

In some cases, a policy may be sold whereby improper information from any number of sources causes an improper rating to appear on the policy. Regardless that the structure is above the base flood elevation, the policy rating code indicates otherwise. In this case, the policyholder is wholly unaware that a technical underwriting error exists and, when a flood occurs, the adjuster may unwittingly rely upon the misinformation and deny the claim in whole or in part.

In these cases, when the policyholder perseveres, it is often learned that FEMA’s topographical maps are out of date. The result is a structure may be higher, as in the case of a new home built upon fill, than an 18 year old FEMA map indicated. In such a case, should the policyholder receive accurate information about the Letter of Map Amendment (LOMA), or Letter of Map Revision based upon Fill (LOMR-F) the claim will be eligible for payment.

FEMA's NFIP website has information regarding LOMA and LOMR-F regulations. You can find it with search engine parameters"NFIP LOMA LOMR-F".

Click here to view letter to Undersecretary Michael Brown, attachments and response



Last Modified: 030105 1803

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